Cotton futures fell on Wednesday after the US government raised its forecast for global and US production and inventories in the 2016-17 crop year. "The 4.5 million bales (the US ending stock projection), considering the crop so far this year, which has been of very good quality, is not a tight situation," said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis.
"So right now, stocks are perceived to be relatively plentiful despite the demand being very good." Global and US inventories by the end of July 2017 will be higher than previously expected due to higher production outlooks, the US Department of Agriculture (USDA) forecast in its World Agriculture Supply and Demand (WASDE) report on Wednesday.
The agency raised its outlook for world output to 103.3 million 480-pound bales, mainly driven by an uptick in India crop, and slightly lowered the outlook for global demand.
The March cotton contract on ICE Futures US, settled down 0.48 cent, or 0.69 percent, at 68.86 cents per pound. It traded within a range of 68.41 and 69.83 cents a pound. The dollar index was up 0.61 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.24 percent. The Chicago Board of Trade's most-active corn contract was down 11-1/2 cents at $3.42-3/4 a bushel. Most-active soybeans sank 23-1/4 cents to $9.88 a bushel, while wheat lost 5-1/2 cents to $4.09-3/4 a bushel.
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